Category Archives: Media

A Canadian view of the insolvency of the Star-Advertiser’s parent company

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Tyler Olsen, managing editor of the Fraser Valley Current, penned two long stories this week analyzing news that Black Press Ltd. is insolvent and has filed for protection from creditors while it attempts to reorganize and prepare a solicitation of offers to purchase the company’s sprawling assets.

It’s of interest in Hawaii because Black Press is the parent company of the Honolulu Star-Advertiser, smaller newspapers on Kauai and Hawaii Island, along with dozens of other community newspapers in Western Canada and the State of Washington, which are owned through an array of subsidiaries and affiliates. The Star-Advertiser is now the largest publication in the Black Press stable of newspapers.

“How an Ohio newspaper sank a BC publishing empire/Black Press lost more than $150 million after buying an Akron, Ohio newspaper in 2006“.

“What creditor protection means for Black Press, its papers, and readers/In drive to pay off creditors, BC’s dominant community newspaper company likely to consider staff cuts, future of print“.

To read the stories, you’ll be asked to register for the free publication. Don’t be intimidated. I entered my email and was immediately able access the site.

Olsen’s FV Current is a newsletter published 5 times a week.

Here’s how it describes itself: “How to stay connected to local news, events, food, and people in Abbotsford, Chilliwack, Langley, Mission, and the rest of the Fraser Valley. Read by 30,000+ locals daily.”

Olsen has long experience with Black Press and a good sense of the history of the company.

A full declaration of my conflict of interests for this story would be the story of much of my adult life. So we’ll keep this as brief as possible. My first work experience week in high school was at the Black Press-owned newspaper in my hometown of Vernon, BC. My first post-university newspaper job was at the same paper. I returned to Black Press in 2014, when it acquired the second paper I worked at: the Chilliwack Times. The company then transferred me to work at the Abbotsford News, another of its titles. I wasn’t enthusiastic about that move, I was less happy when the company closed down the Times, and I was heartbroken when personal tragedy struck former co-workers pushed out of jobs. I left Black Press unhappy with the company’s direction. Today, I operate an ostensible competitor to Black Press, though we actually rely on its reporters’ local news-gathering operations to help inform our readers through our Need To Know section. I consider many people still employed by the company to be friends and want them to stay employed. I love newspapers.

But somebody should write in depth about what led a BC paper chain with continental ambitions to end up filing for creditor protection this week. And if history is any indication, it’s possible nobody will. So here’s what happened. All the facts here are either a matter of public record and broadly known or come directly from personal observation.

Tucked away in the second of Olsen’s stories is this short section specifically addressing the Star-Advertiser.

One of the first questions they’ll face will concern the future of the chain’s single-largest paper: the Honolulu Star-Advertiser. The paper could, hypothetically, be sold. It’s the only major daily newspaper in the chain and, as such, could potentially fetch the largest sum of money should it be sold. But it also might be a money pit that is currently sucking up profits from the chain’s other smaller papers.
Black Press obtained its Hawaii daily paper for just $10 two decades ago. One would think it would be worth more than that today. In 2021, the Tribune Publishing newspaper chain in the United States sold for $633 million. Tribune owned 11 papers, putting the average value of each one at around $55 million. The Baltimore Sun was valued by one potential buyer at around $63 million. But a newspaper’s value also depends on the financial baggage and obligations it carries, and how profitable it is. Some North American newspapers have been judged essentially worthless and either stripped for assets, folded, or turned into non-profits.

The Hawaii paper could also be judged essentially worthless in the short term, but with potentially long-term value if its new owners can make it profitable—a shift that, if history is any indication, would be attempted via severe staffing cuts.

In any case, news junkies will find some interesting background here.

“Insolvency” and “bankruptcy” are behind the sale of the Black Press chain of newspapers

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The news of the insolvency and bankruptcy court filing on behalf Black Press Ltd. hit this week. It hit hard.

It leaves many of us wondering if Honolulu, Hilo, Kona, and Kauai will continue to have daily newspapers or, if they do continue under the proposed new ownership of Carpenter Media Group, what they will look like.

In a news release, Black Press tried to play down concerns, never mentioning “bankruptcy” or “insolvency.”

But quite clearly, that’s what is going on. Civil Beat’s Stewart Yerton provided the most complete story so far on what’s happening (“Mississippi Publisher Looks To Buy Struggling Star-Advertiser And Other Hawaii Papers“) based on digging into the court filings. It’s worth reading if you’re concerned about the future of news.

Black Press, based in British Columbia, is the owner of Oahu Publications, which in turn owns the Honolulu Star-Advertiser and several other papers across the state. Black Press which also owns a cross-border stable of newspapers in Canada and the U.S., first obtained an order from a Canadian court staving off creditors, and then filed in the Bankruptcy Court in Delaware to have the original order honored in the U.S.

Yerton traces the company’s woes specifically to the ill-advised purchase of the Akron Beacon-Journal in 20016 for a reported $165 million. After ten years of losses at the newspaper, Black sold it for 10¢ on the dollar. It’s the kind of hit that’s difficult to recover from.

Black Press has a deal to receive short term financing while the company readies a public solicitation of bids for the whole caboodle. If no other bidders appear, the financing group will take ownership.

Simultaneously, Black Press owner David Black announced his retirement, apparently effective immediately.

There was a bit of deja vu in this situation. On September 15, 1999, news spread that the Honolulu Star-Bulletin, the city’s evening newspaper, was to be closed. I had joined the S-B staff as an investigative reporter in 1993.

I started posting news and digital photos online. It predated general use of the term, “blog.”

Here’s what I wrote at the time.

The news that the Star-Bulletin would close leaked out on Wednesday afternoon, September 15, 1999, after our publisher and managing editor emerged from a management meeting with somber expressions, word of a major announcement scheduled the next morning, and “no comment” beyond that. Word quickly spread to other media, and news of the Star-Bulletin’s demise led the television news that night. A number of reporters had left for the day before the rumors emerged, and heard about the closure for the first time while watching news on the tube.

The official word came the following day. We were given a 60-day notice of the newspaper closing.

I started writing about the experience from inside the newsroom. I had just purchased an early consumer digital camera, a little Ricoh RDC-2, which I happened to have with me on September 15. If you’re interested, you can follow along the not-quite-daily posts.

In the end, the newspaper didn’t close, for a variety of reasons, including a federal lawsuit, and eventually David Black made a stealth bid for the newspaper after secretly negotiating to purchase MidWeek, which had its own printing press.

Black’s purchase of the Star-Bulletin closed in March 2001. The newspaper survived a close call. My job didn’t. I received one of those unpleasant “we will not longer require your services” letters, and my short but successful newspapering career ended.

Luckily, I didn’t stop writing. And, even luckier, I was married to a professor with tenure, which took the financial edge off the loss of my only full-time paid gig as a reporter.

You can be sure that everyone at the Star-Advertiser is quietly assessing their options, whether to sit tight and see how things develop, or jump ship now ahead of the pack. As I recall that last time 20+ years ago, it was very, very difficult for all involved.

Star-Advertiser announces sale of its parent company

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The Honolulu Star-Advertiser, Oahu’s line daily newspaper, is in the process of being sold, according to a story in today’s newspaper.

But what does the first sentence in the story mean?

The owner of the Honolulu Star-Advertiser has entered a court-supervised restructuring to reduce debt and to position the company for a possible sale to a partnership that plans to invest in quality, impactful journalism in Hawaii.

What court? What country? Black’s empire is based in Canada, so is the court in Canada or the U.S.?

Does this mean that Black Press filed for bankruptcy protection? The description certainly sounds that way, but remains purposefully vague.

Star-Advertiser owner restructuring, sale of company in the works

Note: See the comments for a link to the company press release.

And a story published in Alaska noted that the company’s majority owner, David Black, 77, announced his retirement at the same time as the sale was made public.

Winding down….

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Well, it has been a fascinating six years digging into the Mike Miske case. I learned a lot, dug up a lot of interesting details about the case, wrote hundreds of stories and blog posts explaining the case as it developed. It has been the kind of document-rich situation that relied on the kind of reporting I do best. What a gift.

But now, with the trial set to start next week and last an estimated 6-8 months, my major role is over.

Here’s the thing. Although I love thinking about continuing my work by covering the trial, getting up daily (like the jurors and all the other court officials) and getting myself downtown to the federal court by 8 a.m. and hearing all the testimony and arguments as they are made, it’s not realistic. I’m too far down the “retired” path to commit to that kind of schedule. It sounds too much like work, and I haven’t wanted to hold down a regular job for a very long time.

So although I’ve written more about the case than anyone, I won’t be able to provide the same kind of coverage of the trial. For that, you’ll have to look elsewhere. Civil Beat has assigned a reporter, and I’ll contribute where I can. Hawaii News Now has followed the case over time, and I’m sure will report from the trial.

I also realized there’s a way in which all that I’ve written about the case, which has largely been based on documents that likely won’t be admissible at trial, could interfere with understanding how the case is unfolding in court, which rests solely on the evidence presented to the jury. That’s why jurors are told to avoid reading or watching any news about the case, and not to discuss it with others, even their families. At this point, the public probably most needs to know what the jury is hearing. That’s the evidence the jurors will base their decisions on. Other information, known and unknown, true or not, will be irrelevant to the outcome of the case and the verdicts handed down.

That’s what is needed to provide a fair trial.

But it also means that when the trial is over, we’ll have verdicts on each of the charges, but some of the most important systemic questions probably won’t be answered.

Were Miske’s affairs aided by disgraced former prosecutors Katherine Kealoha? Did Miske rely on police officers or other law enforcement personnel who took payoffs or fed inside information to him for other reasons? Did Miske have friends in politics that aided his ability to stay out of legal trouble? Was there someone, or multiple someones, “higher up” in the criminal world that Miske had to deal with? If Miske was able to buy high-paying jobs on Honolulu’s docks for his son and other associates, was he the only one with such access? And is that system still in place? And then there’s a different question we’ll have to reckon with–was it worth the cost? This federal investigation started in March 2014, almost ten years ago, and is likely still ongoing. Ten years of effort. Even just warehousing, organizing, and accessing the mountains of evidence in the case, more than 2 million pages of documents along with more than 80 Terabytes of digital data, must have involved substantial costs that continue each month. Then there are legal fees and court costs, on and on.

But you get the idea. Answers to these questions are likely irrelevant to proving or defending against the specific charges, so they are unlikely to be addressed in the course of the trial.

So there will be more opportunity when the trial is over, and the record is available, to jump back in and deal with the leftovers.

In the meantime, I’ll be like you, largely a spectator hoping that there’s enough news coverage to keep abreast of what’s happening in federal court.